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Australia - Broadband Market - Insights, Statistics and Forecasts

Australia - Broadband Market - Insights, Statistics and Forecasts

Broadband market enters a new era following the NBN strategic review

The National Broadband Network continuing evolution

Since being implemented in 2012, Australia’s NBN has undergone significant changes. The late-2013 strategic review of the NBN, commissioned by a newly elected government, established a very different framework. Instead of 93% of the population being covered by FttP, the new architecture has called for a hybrid network incorporating FttP and FttN, and utilising existing DSL and HFC plant.

Overall, the initial development of the NBN reflected a serious response to the relatively poor quality of Australia’s broadband infrastructure. It was also a response to the intransigence of the dominant telco, Telstra. The government was minded to change its broadband infrastructure plan from a regional to a national focus, which to a degree has been linked to the development of the digital economy supporting policies relating to e-commerce, e-health, e-education and smart grid infrastructure. These are all aimed at utilising the NBN for a myriad of purposes beyond broadband.

Residential and business broadband markets: growing adoption of faster services

Although the business market in Australia was quick to embrace broadband, mainly to access faster data speeds, a significant proportion of smaller operators has yet to establish an online presence, and by early 2014 only about 38% had a business website.

The government’s ‘Broadband Availability and Quality’ report, published in December 2013, showed that 1.4 million premises (13% of the total) across many areas of the country had no adequate broadband infrastructure. These areas include regional and remote regions but also pockets within urban communities. Given the state of broadband availability and speeds, many businesses still depend on mobile rather than fixed-line broadband. A growing number in areas where access to the NBN has been made available have switched to fibre broadband services, which enable these companies to compete in the global economy more effectively. The faster speeds of fibre infrastructure will see the rapid adoption by businesses of services such cloud computing, online interaction, and media conferencing.

Business broadband has also allowed greater choices in working environments, with the ability for employees to tele-work, either from home or on the road while making use of improved mobile broadband. As such, smartphones and tablets form an increasing part of the business ICT environment.

DSL and HFC markets: stable growth as copper plant survives within the NBN
0The DSL sector continues to show resilience in the marketplace, bolstered in recent years by operators adopting new technologies which can deliver greater data capacity on legacy copper infrastructure. In conjunction with Telstra’s unbundled local loop service, which provides a platform for competitors to offer broadband services, the slow-down in the rollout of the NBN has also meant that the number of customers expected to migrate from copper to fibre-based services is far lower than initial NBN Co forecasts. Many telcos have installed their own DSLAM infrastructure, enabling them to provide fairly high-speed internet services via ADSL2+.
0Following the strategic review of the NBN, which emphasised a combination of FttN and HFC architecture, the transition from DSL to fibre-based infrastructure is likely to be on a far smaller scale than formerly envisaged.

The cable sector has been stable in recent years, and though Telstra and Optus have upgraded parts of their cable networks with DOCSIS3.0 technology, there has been little investment in expanding network footprint given that operators expected these networks to be incorporated within the NBN and then superseded by FttP. The new NBN has placed a greater emphasis on existing hybrid fibre coax plant being part of the national broadband plan. As such, many cable customers in NBN areas will not be migrated to the new fibre network.

In early 2014 there are fewer than one million cable broadband subscribers, accounting for less than to 8% of the total broadband market in Australia. However, most of these subscribers are high-end users providing relatively high ARPU for the cablecos.

Mobile broadband growth supported by Australia’s globally impressive LTE infrastructure

By the end of 2014 about a third of Australia’s mobile subscribers will be on LTE networks. Telstra took the lead in this market, followed by Optus and Vodafone which launched services during 2013. These MNOs have invested in spectrum and network upgrades to bolster network capacity, while the geographic extension of LTE will see wider take-up from consumers in coming years. Although the MNOs will be expecting a greater return on their investments, partly by charging a premium for LTE services, price competition will keep revenue growth low.

This report provides key data and in-depth analysis on trends in the Australian broadband market. It reviews the NBN since its inception in 2007, as provides insights into the steps that have been taken subsequently. It assesses the ISP market, detailing the number of operators in each sector as well as the strategies of the major players. Comparisons with international markets are included to present an overview of the broadband landscape. It also analyses the drivers behind internet adoption among Australian households, supported by a range of surveys and statistical overviews from sources including the ABS, ACMA and the government’s Broadband Availability and Quality Report.

Key developments:

iiNet to deploy up to 30,000 WiFi hotpots in capital cities; Victorian government looks to offer free WiFi in three cities; Optus trials TD-LTE broadband using the 2300MHz band; m-payment and m-banking developments; NBN transition developments; DOCSIS standard upgrade to 3.1; VDSL2 and vectoring DSL developments; ACCC sets wholesale DSL prices to mid-2014; tablet penetration among households reaches 44%; iiNet acquires Adam Internet, sells TransACT fibre infrastructure to NBN Co; interim satellite service reaches capacity; Foxtel’s anticipated launch of triple play services to affect broadband market share among key players; includes ACMA reports for 2013, surveys to end-2013, company results for FY2013; ABS data to June 2013; analysis of the NBN strategic review; market developments to March 2014.

Companies covered in this report include:

Telstra, Optus, NBN Co, VHA, BigAir, vividwireless, Unwired, TPG, Vodafone, AUSTAR, FOXTEL, Neighbourhood Cable, M2, iiNet, Primus, TransACT.

Data in this report is the latest available at the time of preparation and may not be for the current year


  • EXECUTIVE SUMMARY
  • GENERAL OVERVIEW AND MARKET INSIGHTS
    • OVERALL SIZE OF THE MARKET
      • Total broadband subscribers
        • Table Historical - Total broadband subscribers and annual change - 2000 - 2004
        • Table Total broadband subscribers and annual change - 2005 - 2015
        • Table Broadband subscribers, DSL and cable -2008 - 2014
      • Market shares
        • Table Broadband market - overall market share by technology - 2003 - 2014
    • ACCESS REVENUES
      • Statistical overview
        • Table Broadband revenues by major provider - 2005 - 2013
        • Table Annual change in broadband access revenues by major provider - 2006 - 2013
        • Table Market share of broadband access revenues by major provider - 2005 - 2014
      • Average Revenue per User (ARPU)
        • Table Estimated fixed broadband ARPUs - 2006 - 2014
    • OTHER SURVEYS AND STATISTICS
      • Australian Bureau of Statistics (ABS) Survey - update December 2013
      • Statistical information by technology
        • Table Internet subscribers by access technology - 2009 - 2013
        • Table Broadband market share by technology and annual change - 2008 - 2013
        • Table Business, government and household internet subscribers - 2009 - 2013
      • Broadband speeds
        • Table Subscribers' average speed in Australia versus selected countries - 2010 - 2013
        • Table Proportion of internet subscribers by download speed - 2009 - 2013
        • Table Internet subscribers by download speed - 2008 - 2013
      • Broadband traffic
        • Table Terabytes of data downloaded by access technology (historic) - 2008 - 2013
        • Table Annual change in data downloaded by access technology - 2011 - 2013
    • ISP MARKET OVERVIEW
      • The market going into 2014
      • Data limiting
      • ISP market statistics
        • Table Number of ISPs by size in the Australian market - 2008 - 2013
        • Table Number of ISPs - 2001 - 2014
        • Table Internet subscribers by key providers - June 2013
      • ISPs contracting but some sectors may expand
      • Digital Media - Triple play business models (separate report)
      • Voice over Internet Protocol (VoIP) added to naked DSL
    • BENCHMARKING WITH OTHER COUNTRIES
      • Fixed broadband
        • Table Fixed broadband access among internet households - selected countries - 2008 - 2013
      • Wireless broadband
        • Table Top ten OECD countries by wireless broadband subscriptions - 2012 - 2013
  • STATISTICAL OVERVIEW OF THE DSL MARKET AND ITS PROVIDERS
    • BRIEF OVERVIEW OF THE NBN
    • REGULATORY ENVIRONMENT - ANALYSIS
      • The impact of fibre optic networks on digital subscriber line (DSL) regulation
      • Unbundling of the local loop (ULL) and line sharing
      • Wholesale DSL pricing
        • Table Wholesale DSL pricing, per month per user - 2013 - 2014
    • DSL INFRASTRUCTURE
      • Overview
        • Table Number of infrastructure providers by number of ADSL-enabled exchanges - 2007 - 2008; 2010 - 2011
        • Table Number of ADSL broadband subscribers -2008 - 2013
        • Table DSL subscribers and availability by state/territory - 2013
        • Table DSL premises affected by distance from exchange - 2013
      • Tool for competitors
      • DSLAM infrastructure
        • Table Number of DSLAMs by major providers - 2009 - 2012
        • Table Total number of DSLAMs - 2006 - 2013
        • Table Number of ADSL and ADSL2+-enabled exchanges - 2013
      • Street cabinet IP DSLAM2 upgrades (Top Hat)
        • Table Top Hat enabled exchanges - 2011 - 2013
      • VDSL developments
      • VDSL vectoring
    • BRIEF OVERVIEW OF BROADBAND PROVIDERS MARKET
      • Market consolidation
      • The shrinking number of ISPs
      • Market share statistics
        • Table Broadband DSL retail subscribers by major provider - 2009 - 2013
        • Table Total business and residential broadband subscribers - 2006 - 2014
        • Table Telstra broadband subscribers by sector - 2007 - 2013
  • STATISTICAL OVERVIEW OF THE HFC MARKET
    • TECHNOLOGY
      • Hybrid fibre coax (HFC)
      • The DOCSIS standard
      • The next development for DOCSIS
    • MARKET STATISTICS AND ESTIMATES
      • Table Cable broadband subscribers by major operator and annual change - 2002 - 2014
      • Table Cable subscribers versus other broadband technologies - 2009 - 2013
    • AUSTAR UNITED COMMUNICATIONS LTD (AUSTAR)
      • Overview
    • BES/E-WIRE
      • Overview
    • TRANSACT
      • Overview
    • TELSTRA
      • Background information
      • Network upgrades
    • OPTUS
      • Overview
        • Table Optus financial data - 2011 - 2013
        • Table Optus financial data by sector - 2009 - 2013
        • Table Optus on-net broadband subscribers - 2009 - 2013
      • Network upgrades
    • INDUSTRY ANALYSIS
      • Do we need infrastructure-based competition?
      • Moving on from the HFC of the past
      • No long-term future in HFC cable broadband
      • HFC decommissioning as NBN rolls out?
      • From HFC to Fibre-to-the-Home (FttP)
      • Open access policy
  • STATISTICAL OVERVIEW OF THE MOBILE BROADBAND MARKET
    • MARKET OVERVIEW AND ANALYSIS
      • Market overview
      • Uptake in 4G adds to mobile broadband users
      • Vodafone launches LTE
      • Mobile data and messaging exceeds voice revenues
      • Globalgig hotspot local and international data roaming
      • Capital expenditure builds into the future
      • Overview of 4G frequency usage
      • Spectrum reallocations
      • Hardware drives applications
      • Mobile broadband to drive structural change
      • Mobile broadband slowly substitutes fixed services.
      • The economic impact of mobile broadband
    • MOBILE BROADBAND MARKET STATISTICS
      • Mobile broadband subscribers
        • Table Wireless broadband subscribers by access type - 2009 - 2014
        • Table Mobile broadband subscribers by mobile network operator - 2007 - 2013
        • Table Estimated mobile broadband data downloaded in Petabytes - 2007 - 2013; 2015
      • Mobile broadband revenues
        • Table Estimated mobile broadband revenues and annual change - 2007 - 2014
        • Table Mobile broadband monthly ARPU - 2007 - 2014
      • Fixed wireless broadband market
        • Table Fixed wireless broadband subscribers by major operator - 2008 - 2013
    • FORECASTS AND OTHER DEVELOPMENTS
      • Mobile advertising
      • M-payment services
      • M-banking
      • Mobile broadband boom the killer app for FttP
      • Fixed/mobile call market
      • Revenue forecasts
        • Table Forecast mobile broadband and voice revenues - 2008; 2013; 2018
  • BUSINESS BROADBAND MARKET STATISTICS
    • MARKET TRENDS
      • Business market overview
        • Table Business, government and household internet subscribers - 2009 - 2013
        • Table Business broadband connections, by platform - Jun 2012
      • ISPs targeting the business sector
      • Broadbanded companies moving forward
      • The NBN and the business market
      • Business need faster speeds to communicate
        • Table Business uptake of broadband by access type - 2010 - 2013
    • BUSINESS MARKET SURVEYS
      • NBN Business Readiness Surveys
      • Remote access and operation needed
      • Small Business Telecommunications Service Use and Experience
      • Surveys reveal that moving online benefits businesses
        • Table SME online trends - websites versus social media - 2010 - 2013
      • Telstra Productivity Indicator
      • Sensis - e-business report
        • Table Historic - SME computer equipment ownership trends - 1999 - 2004
        • Table SME computer equipment ownership trends - 2005 - 2013
        • Table Computer hardware expenditure - SMEs and medium businesses - 2001 - 2013
        • Table Business trends in internet connections - 1998 - 2013
        • Table SMEs internet access methods, by technology - 2010 - 2013
        • Table Top uses of the internet by SMEs - 2010 - 2013
      • Optus Future of Business Report
        • Table Meeting customer expectations using internet applications - 2011 - 2013; 2018
        • Table Expectations of customer e-payments - 2011 - 2012; 2015
    • BUSINESS CUSTOMER EXPENDITURE ON TELECOMS
      • Overall telecom spend - business market
        • Table Estimated telco product mix of business customer spend - 2014
        • Table Estimated business and government market spending - 2013
      • SME market statistics
        • Table Revenue mix - total spend of telecoms - SME market - 2014
  • RESIDENTIAL BROADBAND MARKET STATISTICS
    • STATISTICAL OVERVIEW RESIDENTIAL MARKET - TOTAL TELECOMS
      • Table Revenue mix - total spend of telecoms - residential market - 2013
      • Table Service providers' market share and revenue in the residential market - 2013
    • INTERNET HOUSEHOLD STATISTICS
      • Australian Bureau of Statistics (ABS) surveys and internet connectivity
        • Table Historic - Total households versus internet enabled households - 1999 - 2004
        • Table Total households versus internet enabled households - 2005 - 2014
        • Table Broadband component of internet enabled households - 2005 - 2015
        • Table Proportion of internet households with children - 2005 - 2009; 2010 - 2013
        • Table Internet access households with children - 2005 - 2009; 2010 - 2013
      • Australian Communications and Media Authority (ACMA) surveys
        • Table Time spent online, by age - June 2012
        • Table Frequency of internet use, by internet population - June 2012
    • TRENDS IN THE RESIDENTIAL MARKET
      • Data increases in volume
        • Table Fixed-line broadband data usage by users - 2008 - 2013
        • Table Fixed-line broadband data usage by users - 2012 - 2013
      • Mobile broadband - no alternative to fixed line services.
      • Dial-up internet not hanging up, just yet
        • Table Historic - Dial-up and broadband internet subscribers - 2003 - 2004
        • Table Dial-up and broadband internet subscribers - 2005 - 2013
    • HOUSEHOLD USE OF TECHNOLOGY
      • Computer technologies
        • Table Computerisation in the home - 2013
      • Broadband technologies
      • Internet social media activities
        • Table Proportion of the population using social networking sites - 2011 - 2013
        • Table Social network site users - 2012 - 2013
    • OTHER RESIDENTIAL MARKET SURVEYS
      • Online services
        • Table Top 5 online applications - 2013
        • Table Use of internet applications - 2013
      • Fixed broadband stats: a federal report
      • New generations survey
      • Customer service issues and the Telecommunications Industry Ombudsman (TIO)
        • Table Total new complaints to the TIO - 2006 - 2013
        • Table Number of complaints to the TIO - by levels - 2009 - 2013
      • Demand for cost-effective broadband
  • THE NATIONAL BROADBAND NETWORK
    • GENERAL OVERVIEW OF THE PLAN
    • HOW AUSTRALIA GOT ITS NBN
    • NATIONAL INTEREST UTILITY
    • NBN NATIONAL INFRASTRUCTURE, NOT JUST TELECOMMS
    • ECONOMIC REFORMS
      • Fundamental change to the economy
      • Business modelling - the key to success of the NBN
        • Table Economic benefits of broadband - overview of surveys
      • NBN Co 2.0
      • The multi-technology NBN
    • WHY WIRELESS BROADBAND IS NO ALTERNATIVE TO FTTP

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